A national IFA group fears that Treasury pension proposals will hurt the sick and redundant.

LEBC Group has written to the Government, saying that older workers taking time off to look after elderly or sick relatives could be hit by Money Purchase Annual Allowance changes.

The proposed reduction by HMRC of the MPAA from £10k to £4k a year from 6 April will be detrimental to some older workers, particularly those who through no fault of their own, may need to access their pensions early in order to cope with personal and family circumstances, LEBC claimed.

These include:
· Older workers taking time off to look after elderly or sick relatives.
· Those facing health issues themselves and not able to work full time.
· Those made redundant and forced to re-train or accept a lower paid job.
· The self employed and “gig economy” workers who may have gaps between contracts.

LEBC director Kay Ingram said: “Our concern is the unintended consequences of restricting future tax relief on pension savings for the groups we have highlighted could have undesirable and severe restrictions.

“We do not believe that abuse of pension savings tax relief is widespread which appears to be HM Treasury’s motivation for change, as other rules such as the lifetime allowance and restricted annual allowance for higher earners act as a disincentive.”

LEBC has written to HM Treasury also to Peers and MPs on the Treasury and Work and Pensions Select Committees highlighting its concerns.

Since 2015, the firm said it has advised 35,000 individuals from all walks of life on the merits or otherwise of accessing their pension plans under the new ‘Freedoms’.